Friday, February 27, 2009

Willem Buiter: close the tax havens (again)

"There is the need and opportunity to close down all tax havens and regulatory havens. Tax havens are defined as countries that have bank secrecy, which includes Switzerland, Austria and Luxembourg as well as the usual micro-state suspects (bank secrecy or bank privacy is the legal principle according to which banks can protect personal information about their customers, even from the tax authorities and police authorities of these customers). The anonymity provided by bank secrecy promotes tax evasion, tax avoidance (or fraud), money laundering and hiding the proceeds of criminal activity. Regulatory havens are nations that offer companies the opportunity to avoid global standards for reporting, governance, auditing, transparency, openness etc. Tax havens and regulatory havens are key elements in the global regulatory and tax arbitrage games that have undermined government revenue bases and weakened global regulatory standards.

The means to put tax havens out of business are simple: forbid banks, other financial institutions and private persons from doing business with and engaging in transactions with banks and other financial institutions located in countries that have bank secrecy. To take care of regulatory havens, don’t recognise and enforce contracts drawn up under their laws and do not recognise court judgements originating from tax havens."

1 Comments:

The means to put tax havens out of business are simple: forbid banks, other financial institutions and private persons from doing business with and engaging in transactions with banks and other financial institutions located in countries that have bank secrecy. To take care of regulatory havens, don’t recognise and enforce contracts drawn up under their laws and do not recognise court judgements originating from tax havens."

No. The means to put tax havens out of business are much simpler than that.

Link taxation to the holding of land titles. This has two effects. First, it gets hold of the principal stream of revenue that gets siphoned off to tax havens. Second, it cannot be avoided or evaded because land is fixed and compliance is easily enforced. Problem solved.Let's stop fussing and get on with it. Deal with the problem at its source.

Links to this post:

About Me

The Tax Justice Network (TJN) is an international, non-aligned network of researchers and activists with a shared concern about the harmful impacts of tax avoidance, tax competition and tax havens.
www.taxjustice.net